Bitcoin is experiencing a “crisis of faith” after falling more than 40% from its all-time high and its market capitalization shrinking by approximately $1 trillion, according to analysts surveyed by Bloomberg. They estimate the market sees no new growth catalysts.
Experts note that Bitcoin is facing increasing competition from alternative assets. Gold is strengthening its position as a safe haven, stablecoins are dominating payments, and prediction markets, including Polymarket, are attracting speculative capital. Analyst Noelle Acheson noted:
“New speculative venues like prediction markets and commodity exchanges are diverting attention from the crypto market. Now that BTC has become a macro asset, it must compete with a multitude of alternatives, most of which are easier to explain to trustees, clients, and boards of directors.”
Despite political instability and a weak dollar, gold and silver are rising this year, while cryptocurrencies are declining. Over the past three months, more than $16 billion has flowed into gold-focused exchange-traded funds (ETFs), while investors have withdrawn about $3.3 billion from spot Bitcoin ETFs, according to Bloomberg. Tom Essaye, president and founder of Sevens Report, stated:
“People are starting to realize that Bitcoin is what it’s always been—a purely speculative asset. Bitcoin isn’t a replacement for gold. It’s not a hedge against inflation—frankly, there are other, more effective hedges where you don’t have to worry about volatility.”
Analysts also warn of the risk of Bitcoin’s conceptual blurring. The asset is simultaneously positioned as a store of value, a speculative instrument, a technological platform, and a political symbol, complicating its market acceptance.
When an asset attempts to serve as a store of value, a speculative instrument, and a technology platform simultaneously, its market positioning becomes blurred. This can dampen investor interest and gradually diminish its value.
An additional indicator of sentiment was a surge in searches for “Bitcoin will fall to zero” in Google Trends, which reached a maximum of 100 points.
